Virtualization rights conferred by some Microsoft server application licenses can differ depending on whether the licenses are applied to on-premises servers or multitenant servers hosted by a service provider.

License mobility through Software Assurance (SA), a new SA benefit that applies to most server application licenses as of July 2011, allows customers with SA on server application licenses to reassign these licenses to multitenant servers at a third-party service provider hoster. However, virtualization use rights are not necessarily the same when licenses are moved to the cloud. Among other things, the number of operating system environments (OSEs) covered by a single license and the amount of processor resources an OSE can use under the context of a single license can differ. (An OSE refers to an OS instance running on either a physical or virtual server; in the context of this discussion, OSE is usually synonymous with "virtual machine.")

This chart lists server application licenses and key differences between their on-premises licensing use rights and corresponding licensing use rights when moved to multitenant servers hosted by a service provider hoster. Depending on the product, the results of moving a license to the cloud can vary significantly.

Note that the term "virtual processor" used in the chart has a specific meaning for purposes of licensing. A virtual processor, for purposes of licensing, is the equivalent of one physical processor's worth of computational power (with a physical processor defined as a chip occupying a socket on the motherboard), which is a very different definition than the industry-accepted technical definition of virtual processor. As stated in Microsoft's quarterly Product Use Rights (PUR) document, "Solely for licensing purposes, a virtual processor is considered to have the same number of threads and cores as each physical processor on the underlying physical hardware system."

Products License On-Premises Servers Hosted Multitenant Servers
SQL Server Processor license, Standard edition Each processor license covers one OSE; OSE requires more than one processor license if it is configured to use more than one virtual processor. Each processor license covers one OSE, but the OSE can use up to four virtual processors.
Server license, Enterprise edition SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each server license covers only one OSE, with no restrictions on the number of virtual processors used by the OSE.
Processor license, Enterprise edition If all the physical processors in the server are assigned a processor license, SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, but the OSE can use up to four virtual processors.
Processor license, Datacenter edition (Datacenter edition requires all the physical processors in the server to be assigned a processor license.) SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, and the OSE can use up to four virtual processors.
Dynamics CRM

Exchange Server

Lync Server

Forefront Identity Manager

Forefront Unified Access Gateway
External Connector (EC) Each EC covers an unlimited number of OSEs on a licensed server. Each EC license covers only one OSE per licensed server.
BizTalk Server

Forefront Threat Management Gateway
Processor license, Standard edition Each processor license covers one OSE; OSE requires more than one processor license if it is configured to use more than one virtual processor. Each processor license covers one OSE, but the OSE can utilize up to four virtual processors.
Processor licenses, Enterprise edition If all the physical processors in the server are assigned a processor license, product can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, and the OSE can utilize up to four virtual processors.
System Center Server Management Suites Enterprise license (SMSE) Requires one SMSE server license per physical server. The license allows four managed OSEs on the licensed server. Allows four managed OSEs per license; however, it is not required that the OSEs run on the same physical server.
Datacenter license (SMSD) Requires all the physical processors in the server to be assigned an SMSD processor license. The licenses allow an unlimited number of managed OSEs on the licensed server. Allows four managed OSEs per license; however, it is not required that the OSEs run on the same physical server.